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Privacy data management innovations reduce risk, create new revenue channels

Published September 25, 2020

Mark Settle
Contributor

Mark Settle is a seven-time CIO, three-time CIO 100 award winner and two-time book author. His most recent book is “Truth from the Valley: A Practical Primer on IT Management for the Next Decade.”

Tomer Y. Avni
Contributor

Tomer Y. Avni is an MBA/MS student at the Harvard Business School and the Harvard School of Engineering and Applied Sciences.

Privacy data mismanagement is a lurking liability within every commercial enterprise. The very definition of privacy data is evolving over time and has been broadened to include information concerning an individual’s health, wealth, college grades, geolocation and web surfing behaviors. Regulations are proliferating at state, national and international levels that seek to define privacy data and establish controls governing its maintenance and use.

Existing regulations are relatively new and are being translated into operational business practices through a series of judicial challenges that are currently in progress, adding to the confusion regarding proper data handling procedures. In this confusing and sometimes chaotic environment, the privacy risks faced by almost every corporation are frequently ambiguous, constantly changing and continually expanding.

Conventional information security (infosec) tools are designed to prevent the inadvertent loss or intentional theft of sensitive information. They are not sufficient to prevent the mismanagement of privacy data. Privacy safeguards not only need to prevent loss or theft but they must also prevent the inappropriate exposure or unauthorized usage of such data, even when no loss or breach has occurred. A new generation of infosec tools is needed to address the unique risks associated with the management of privacy data.

The first wave of innovation

A variety of privacy-focused security tools emerged over the past few years, triggered in part by the introduction of GDPR (General Data Protection Regulation) within the European Union in 2018. New capabilities introduced by this first wave of innovation were focused in the following three areas:

Data discovery, classification and cataloging. Modern enterprises collect a wide variety of personal information from customers, business partners and employees at different times for different purposes with different IT systems. This data is frequently disseminated throughout a company’s application portfolio via APIs, collaboration tools, automation bots and wholesale replication. Maintaining an accurate catalog of the location of such data is a major challenge and a perpetual activity. BigID, DataGuise and Integris Software have gained prominence as popular solutions for data discovery. Collibra and Alation are leaders in providing complementary capabilities for data cataloging.

Consent management. Individuals are commonly presented with privacy statements describing the intended use and safeguards that will be employed in handling the personal data they supply to corporations. They consent to these statements — either explicitly or implicitly — at the time such data is initially collected. Osano, Transcend.io and DataGrail.io specialize in the management of consent agreements and the enforcement of their terms. These tools enable individuals to exercise their consensual data rights, such as the right to view, edit or delete personal information they’ve provided in the past.

With Goat Capital, Justin Kan and Robin Chan want to keep founding alongside the right teams

Published September 17, 2020

Justin Kan and Robin Chan have each been angel investing for more than a decade. They’re starting a new fund together now, though, to stay involved as cofounders of more startups.

Goat Capital is a hybrid incubator versus a pure seed investment firm, Chan explains. It will be writing checks ranging between roughly half a million and $3 million dollars, and it is only planning to raise $40 million — so the checks will be selective.

The offering is that “you’re going to be working with Justin and Robin,” he says, as a direct collaboration to help your company succeed. With $25 million closed already from themselves and several family offices, the fund has begun investing globally with particular interests in digital health, ecommerce, digital entertainment and gaming, robotics and climate change.

The goal is not just about being the Greatest Of All Time, Kan adds. In a startup, you “climb high heights and eat shit to get there. That tenacity is what we want.”

It’s a nod to their own successes and struggles as founders over the years, and what they have seen as investors and advisors to a wide range of companies around the world (Twitter, Xiaomi, Bird, Uber, Square, Ginkgo Bioworks, Scale.ai, Cruise, Razorpay, Xendit, Equipment Share, Wave, Teachable, Semantic Machines, Rippling, Built Robotics, etc.)

Kan was a cofounder of Justin.tv, which became Twitch as well as Socialcam. He later had an on-demand company called Exec and previously a calendar app called Kiko, both of which sold for small amounts. Most recently, he took a big shot at the traditional legal industry with Atrium, a law firm and legal software startup that raised big rounds of funding before shuttering earlier this year.

His prototype for Goat is Alto Pharmacy, a booming digital health unicorn today that the founders started in his living room.

“We do think founders should be treated like athletes, going for gold really hard… the Olympic metaphor,” Kan qualifies about the name. “That means grinding for years — and having to rest, too. I’m very passionate about mental health and wellness as part of the journey.” (More on that here.)

Chan, meanwhile, sold his gaming startup in China to Zynga a decade ago, then helped lead a failed attempt to buy Blackberry before founding Operator, a well-funded ecommerce company that closed a few years ago. During the pandemic, he helped create Operation Masks, a nonprofit that has been providing PPE across the US. He’s also an ongoing advisor to Sleeper, Bird, Expa and Flipboard.

The focus will be fully global now. Chan explains that even though you’re seeing more challenges to building a truly global company these days, there’s more space for local startups to win big.

“There’s the US internet, the China internet, the India internet, the EU internet — in some ways it makes those markets more valuable to win, like traditional media. Broadcast and cable are highly geographic but the franchise value becomes higher because of the regulatory moat.”

Chan, on that note, met Kan back when he was a director at [current TechCrunch owner] Verizon Wireless, when Justin.tv was trying to negotiate for free data. When I asked if they had worked out a deal during a phone interview, Kan said “you [expletive] didn’t.”

But it did lead to other co-investments later on, including Ramp, Workstream and others, and now this fund.

Today, Kan says that the focus on teams will be as flexible as the times. “When we started, the internet was America,” he says. “If you weren’t there, you weren’t a company. It’s been a complete reversal of that. Now teams are international, talent is international, more and more companies are building remote first — although you’d seen that before given the costs of the Bay. We have an entirely remote company in North Carolina, Grammarly in Europe… it’s more and more the norm. Smart founders are going anywhere to find talent.

For the two partners, this new fund will be about staying connected to that certain startup feeling that is elusive for anyone trying to build something great.

“There’s nothing more magical than being in the first step of a special company,” Chan says. “That glimpse of the future. We wouldn’t get the same feeling at the growth stage versus working with small teams or a single founder. I think we have the instinct.”

CarbonChain is using AI to determine the emissions profile of the world’s biggest polluters

Published August 21, 2020

It was the Australian bush fire that finally did it.

For 12 years Adam Hearne had worked at companies that represented some of the world’s largest sources of greenhouse gas emissions. First at Rio Tinto, one of the largest industrial miners, and then at Amazon, where he handled inbound delivery operations across the EU, Hearne was involved in ensuring that things flowed smoothly for companies whose operations spew millions of tons of carbon dioxide into the environment.

Amazon’s business alone was responsible for emitting 51.17 million metric tons of carbon dioxide last year — the equivalent of 13 coal-burning power plants, according to a report from the company.

Then, Hearne’s home country burned.

In 2019 wildfires erupted that engulfed more than 46 million acres of land, destroyed over 9,000 buildings, and killed over 400 people and untold numbers of animals — driving some species to the brink of extinction.

Hearne, along with an old friend from his business school rugby days (Roheet Shah) and computer science and machine learning experts from Imperial College of London (Yuri Oparin and Jeremiah Smith), launched CarbonChain that year. The company, now poised to graduate from the latest Y Combinator cohort, is pitching a service that can accurately account for emissions from the commodities industry — which is responsible for 50% of the world’s greenhouse gas emissions.

The company’s services are coming at the right time. Countries around the globe are poised to adopt much more stringent regulations around carbon dioxide and greenhouse gas emissions. The European Union is slowly working toward passage of sweeping new regulations on climate change that are mirrored in the region’s local economies. Even petrostates like Russia are poised to enact new climate regulations (at least according to Russian officials).

What’s missing in all of this are ways for companies to accurately track their emissions and technologies that can adequately monitor how well emissions offsets are working.

CarbonChain tackles this problem by going to the sectors that are responsible for the largest percentage of greenhouse gas emissions, Hearne said.

“The world needs hard accounting and hard numbers of what commodities companies are producing,” said Hearne in a July interview.

To ensure that emissions reductions and regulations are working, regulators need to go after oil and gas and commodities and minerals producers, according to Hearne. “Those sectors are uniform and carbon intensive and that’s how you quantify them,” he said.

CarbonChain has built models for every single asset in the supply chain for these industries, according to Hearne. The company has created digital twins of every piece of equipment used in heavy industry. If CarbonChain can’t get the information about the equipment from the companies that use it, they go to the engineering firms that built the equipment or facility for the company.

“In order to get a number that doesn’t get laughed out of the room we have to go down to the aluminum smelter that has a power station right next to it,” said Hearne. “Ninety percent of its footprint is its electrical usage.”

According to Hearne, CarbonChain’s system is so precise that it can tell users how much carbon emissions are embedded in a cup of coffee or a glass of wine (which is two pounds of carbon dioxide for imported wine, by the way).

CarbonChain is already selling its services to commodities producers and carbon traders who are operating in existing carbon trading schemes.

So far, the company has received roughly $500,000 from the U.K. government and an investment from one of its (undisclosed) commodities customers.

But CarbonChain’s technology seems to have the most rigorous methodology of any of the companies that’s purporting to do emissions monitoring. Other startups purporting to provide carbon emissions data for companies include Persefoni, which raised $3.5 million for its solution, and another Y Combinator graduate, SINAI Technologies.

If the company can actually measure the embedded emissions of materials down to a single piece of rebar, it could have huge consequences for industry broadly.

The company also slots nicely into the trend of entrepreneurs with deep industry experience building vertical solutions based on the collection of massive data sets using machine learning.

Google, Nokia, Qualcomm are investors in $230M Series A2 for Finnish phone maker, HMD Global

Published August 11, 2020

Mobile device maker HMD Global has announced a $230M Series A2 — its first tranche of external funding since a $100M round back in 2018 when it tipped over into a unicorn valuation. Since late 2016 the startup has exclusively licensed Nokia’s brand for mobile devices, going on to ship some 240M devices to date.

Its latest cash injection is notable both for its size (HMD claims it as the third largest funding round in Europe this year); and the profile of the strategic investors ploughing in capital — namely: Google, Nokia and Qualcomm.

Though whether a tech giant (Google) whose OS dominates the world’s smartphone market (Android) becoming a strategic investor in Europe’s last significant mobile OEM (HMD) catches the attention of regional competition enforcers remains to be seen. Er, vertical integration anyone? (To wit: It’s a little over two years since Google was slapped with a $5BN penalty by EU regulators for antitrust violations related to how it operates Android — and the Commission has said it continues to monitor the market ‘remedies’.)

In a further quirk, when we spoke to HMD Global CEO, Florian Seiche, ahead of today’s announcement, he didn’t expect the names of the investors to be disclosed — but a press spokesperson had already shared them with us so he duly confirmed the trio are investors in the round. (But wouldn’t be drawn on how much equity Google is grabbing.)

HMD’s smartphones run on Google’s Android platform, which gives the tech giant a firm business reason for supporting the mobile maker in growing the availability of Google-packed hardware in key growth markets around the world.

And while HMD likens its consistent (and consistently updated) flavor of Android to the premium ‘pure’ Android experience you get from Google’s own-brand Pixel smartphones, the difference is the Finnish company offers devices across the range of price points, and targets hardware at mobile users in developing markets.

The upshot is relatively little overlap with Google’s Pixel hardware, and still plenty of business upside for Google should HMD grow the pipeline of Google services users (as it makes money by targeting ads).

Connoisseurs of mobile history may see more than a little irony in Google investing into Nokia branded smartphones (via HMD), given Android’s role in fatally disrupting Nokia’s lucrative smartphone business — knocking the Finnish giant off its perch as the world’s number one mobile maker and ushering in an era of Android-fuelled Asian mobile giants. But wait long enough in tech and what goes around oftentimes comes back around.

“We’re extremely excited,” said Seiche, when we mention Google’s pivotal role in Nokia’s historical downfall in smartphones. “How we are going to write that next chapter on smartphones is a critical strategic pillar for the company and our opportunity to team up so closely with Google around this has been a very, very great partnership from the beginning. And then this investment definitely confirms that — also for the future.”

“It’s a critical time for the industry therefore having a clear strategy — having a clear differentiation and a different point of view to offer, we believe, is a fantastic asset that we have developed for ourselves. And now is a great moment for us to double down on this,” he added.

We also asked Seiche whether HMD has any interest in taking advantage of the European Commission’s Android antitrust enforcement decision — i.e. to fork Android and remove the usual Google services, perhaps swapping them out for some European alternatives, which is at least a possibility for OEMs selling in the region — but Seiche told us: “We have looked at it but we strongly believe that consumers or enterprise customers actually love [Google] services and therefore they choose those services for themselves.” (Millions of dollars of direct investment from Google also, presumably, helps make the Google services business case stack up.)

Nokia, meanwhile, has always had a close relationship with HMD — which was established by former Nokia execs for the sole purpose of licensing its iconic mobile brand. (The backstory there is a clause in the sale terms of Nokia’s mobile device division to Microsoft expired in 2016, paving the way for Nokia’s brand to be returned to the smartphone market without the prior Windows Mobile baggage.)

Its investment into HMD now looks like a vote of confidence in how the company has been executing in the fiercely competitive mobile space to date (HMD doesn’t break out a lot of detail about device sales but Seiche told us it sold in excess of 70M mobiles last year; that’s a combined figure for smartphones and feature phones) — as well as an upbeat assessment of the scope of the growth opportunity ahead of it.

On the latter front US-led geopolitical tensions between the West and China do look poised to generate a tail-wind for HMD’s business.

Mobile chipmaker Qualcomm, for example, is facing a loss of business, as US government restrictions threaten its ability to continue selling chips to Huawei; a major Chinese device maker that’s become a key target for US president Trump. Its interest in supporting HMD’s growth, therefore, looks like a way for Qualcomm to hedge against US government disruption aimed at Chinese firms in its mobile device maker portfolio.

While with Trump’s recent threats against the TikTok app it seems safe to assume that no tech company with a Chinese owner is safe.

As a European company, HMD is able to position itself as a safe haven — and Seiche’s sales pitch talks up a focus on security detail and overall quality of experience as key differentiating factors vs the Android hoards.

“We have been very clear and very consistent right from the beginning to pick these core principles that are close to our heart and very closely linked with the Nokia brand itself — and definitely security, quality and trust are key elements,” he told TechCrunch. “This is resonating with our carrier and retail customers around the world and it is definitely also a core fundamental differentiator that those partners that are taking a longer term view clearly see that same opportunity that we see for us going forward.”

HMD does use manufacturing facilities in China, as well as in a number of other locations around the world — including Brazil, India, Indonesia and Vietnam.

But asked whether it sees any supply chain risks related to continued use of Chinese manufacturers to build ‘secure’ mobile hardware, Seiche responded by claiming: “The most important [factor] is we do control the software experience fully.” He pointed specifically to HMD’s acquisition of Valona Labs earlier this year. The Finnish security startup carries out all its software audits. “They basically control our software to make sure we can live up to that trusted standard,” Seiche added.

Landing a major tranche of new funding now — and with geopolitical tension between the West and the Far East shining a spotlight on its value as alternative, European mobile maker — HMD is eyeing expansion in growth markets such as Africa, Brail and India. (Currently, HMD said it’s active in 91 markets across eight regions, with its devices ranged in 250,000 retail outlets around the world.)

It’s also looking to bring 5G to devices at a greater range of price-points, beyond the current flagship Nokia 8.3. Seiche also said it wants to do more on the mobile services side. HMD’s first 5G device, the flagship Nokia 8.3, is due to land in the US and Europe in a matter of weeks. And Seiche suggested a timeframe of the middle of next year for launching a 5G device at a mid tier price point.

“The 5G journey again has started, in terms of market adoption, in China. But now Europe, US are the key next opportunity — not just in the premium tier but also in the mid segment. And to get to that as fast as possible is one of our goals,” he said, noting joint-working with Qualcomm on that.

“We also see great opportunity with Nokia in that 5G transition — because they are also working on a lot of private LTE deployments which is also an interesting area since… we are also very strongly present in that large enterprise segment,” he added.

On mobile services, Seiche highlighted the launch of HMD Connect: A data SIM aimed at travellers — suggesting it could expand into additional connectivity offers in future, forging more partnerships with carriers.

“We have already launched several services that are close to the hardware business — like insurance for your smartphones — but we are also now looking at connectivity as a great area for us,” he said. “The first pilot of that has been our global roaming but we believe there is a play in the future for consumers or enterprise customers to get their connectivity directly with their device. And we’re partnering also with operators to make that happen.”

“You can see us more as a complement [to carriers],” he added, arguing that business “dynamics” for carriers have also changed substantially — and customer acquisition hasn’t been a linear game for some time.

“In a similar way when we talk about Google Pixel vs us — we have a different footprint. And again if you look at carriers where they get their subscribers from today is already today a mix between their own direct channels and their partner channels. And actually why wouldn’t a smartphone player be a natural good partner of choice also for them? So I think you’ll see that as a trend, potentially, evolving in the next couple of years.”

As remote work booms, Everphone grabs ~$40M for its ‘device as a service’ offer

Published July 28, 2020

The latest startup to see an uplift in inbound interest flowing from the remote work boom triggered by the coronavirus pandemic is Berlin-based Everphone, which sells a “mobile as a service” device rental package that caters to businesses needing to kit staff out with mobile hardware plus associated support.

Everphone is announcing a €34 million Series B funding round today, led by new investor signals Venture Capital. Other new investors joining the round include German carrier Deutsche Telekom — investing via its strategic investment fund, Telekom Innovation Pool — U.S.-based early-stage VC AlleyCorp and Dutch bank NIBC.

The Series B financing will go on expanding to meet rising demand, with the startup telling TechCrunch it’s expecting to see a 70-100% increase in sales volume versus the pre-crisis period, thanks to a doubling of inbound leads during the pandemic.

“The global pandemic has been a catalyst for growth in the field of digitization,” said CEO and co-founder, Jan Dzulko, in a statement. “We are currently experiencing a significant increase in demand at home and abroad, which is why we are aiming for European expansion with the funding.”

Everphone describes its offer as a one-stop shop, with the service covering not just the rental of (new or refurbished) smartphones and tablets but an administration and management wrapper that covers support needs, including handling repairs/replacements — with the promise of replacements within 24 hours if needed and less client risk from not having to wrangle traditional rental insurance fine print.

Other touted pluses of its “device as a service” approach include flexibility (users get to choose from a range of iOS and Android devices); lower cost (pricing depends on customer size, device choice and rental term but starts at €7,99 a month for a refurbished budget device, rising up to €49,99 a month for high-end kit with a 12-month upgrade); and rental bundles, which can include standard mobile device management software (such as Cortado and AirWatch) so customers can plug the rental hardware into their existing IT policies and processes.

Everphone reckons this service wrapper — which can also extend to include paid apps (such as Babbel for language learning) as an employee on-device perk/benefit in the bundle — differentiates its offer versus incumbent leasing providers, such as CHG-Meridian or De Lage Landen, and from wholesale distributors.

It also touts its global rollout capability as a customer draw, checking the scalability box.

Its investors (including German carrier, DT) are being fired up by the conviction that the COVID-19-induced shift away from the office to home working will create a boom in demand for well-managed and secured work phones to mitigate the risk of personal devices and personal data mingling improperly with work stuff. (On that front, Everphone’s website is replete with references to Europe’s data protection framework, GDPR, repurposed as scare marketing.)

“Everphone envisions that every employee will one day work via their smartphone,” added Marcus Polke, partner at signals Venture Capital, in a supporting statement. “With this employee-centric approach and integrated platform, everphone goes far beyond the mere outsourcing of a smartphone IT infrastructure.”

The 2016-founded startup has more than 400 customers signed up at this point, both SMEs and multinationals such as Ernst & Young. It caters to both ends of the market with an off-the-shelf package and self-service device management portal that’s intended for SMEs of between 100 and 1,500 employees — plus custom integrations for larger entities of up to 30,000 employees.

It says it’s able to offer “highly competitive” prices for renting new devices because it gives returned kit a second life, refurbishing and reselling devices on the consumer market. “Thanks to this profitable secondary lifespan, we are able to offer highly competitive prices and extensive service levels on our rental devices,” Everphone writes on its website.

The second-hand smartphone market has also been seeing regional growth. Swappie, a European e-commerce startup that sells refurbished iPhones, aligning with EU lawmakers’ push for a “‘right to repair” for electronics, raised its own ~$40 million Series B only last month, for example. Its second-hand marketplace is one potential outlet for Everphone’s rented and returned iPhones.

UK gives up on centralized coronavirus contacts-tracing app — will ‘likely’ switch to model backed by Apple and Google

Published June 18, 2020

The UK has given up building a centralized coronavirus contacts-tracing app and will instead switch to a decentralized app architecture, the BBC has reported. This suggests its any future app will be capable of plugging into the joint ‘exposure notification’ API which has been developed in recent weeks by Apple and Google.

The UK’s decision to abandon a bespoke app architecture comes more than a month after ministers had been reported to be eyeing such a switch. They went on to award a contract to an IT supplier to develop a decentralized tracing app in parallel as a backup — while continuing to test the centralized app, which is called NHS COVID-19.

At the same time, a number of European countries have now successfully launched contracts-tracing apps with a decentralized app architecture that’s able to plug into the ‘Gapple’ API — including Denmark, Germany, Italy, Latvia and Switzerland. Several more such apps remain in testing. While EU Member States just agreed on a technical framework to enable cross-border interoperability of apps based on the same architecture.

Germany — which launched the decentralized ‘Corona Warning App’ this week — announced its software had been downloaded 6.5M times in the first 24 hours. The country had initially appeared to favor a centralized approach but switched to a decentralized model back in April in the face of pushback from privacy and security experts.

The UK’s NHS COVID-19 app, meanwhile, has not progressed past field tests, after facing a plethora of technical barriers and privacy challenges — as a direct consequence of the government’s decision to opt for a proprietary system which uploads proximity data to a central server, rather than processing exposure notifications locally on device.

Apple and Google’s API, which is being used by all Europe’s decentralized apps, does not support centralized app architectures — meaning the UK app faced technical hurdles related to accessing Bluetooth in the background. The centralized choice also raised big questions around cross-border interoperability, as we’ve explained before. Questions had also been raised over the risk of mission creep and a lack of transparency and legal certainty over what would be done with people’s data.

So the UK’s move to abandon the approach and adopt a decentralized model is hardly surprising — although the time it’s taken the government to arrive at the obvious conclusion does raise some major questions over its competence at handling technology projects.

Michael Veale, a lecturer in digital rights and regulation at UCL — who has been involved in the development of the DP3T decentralized contacts-tracing standard, which influenced Apple and Google’s choice of API — welcomed the UK’s decision to ditch a centralized app architecture but questioned why the government has wasted so much time.

“This is a welcome, if a heavily and unnecessarily delayed, move by NHSX,” Veale told TechCrunch. “The Google -Apple system in a way is home-grown: Originating with research at a large consortium of universities led by Switzerland and including UCL in the UK. NHSX has no end of options and no reasonable excuse to not get the app out quickly now. Germany and Switzerland both have high quality open source code that can be easily adapted. The NHS England app will now be compatible with Northern Ireland, the Republic of Ireland, and also the many destinations for holidaymakers in and out of the UK.”

Perhaps unsurprisingly, UK ministers are now heavily de-emphasizing the importance of having an app in the fight against the coronavirus at all.

The Department for Health and Social Care’s, Lord Bethell, told the Science and Technology Committee yesterday the app will not now be ready until the winter. “We’re seeking to get something going for the winter, but it isn’t a priority for us,” he said.

Yet the centralized version of the NHS COVID-19 app has been in testing in a limited geographical pilot on the Isle of Wight since early May — and up until the middle of last month health minister, Matt Hancock, had said it would be rolled out nationally in mid May.

Of course that timeframe came and went without launch. And now the prospect of the UK having an app at all is being booted right into the back end of the year.

Compare and contrast that with government messaging at its daily coronavirus briefings back in May — when Hancock made “download the app” one of the key slogans — and the word ‘omnishambles‘ springs to mind…

NHSX relayed our request for comment on the switch to a decentralized system and the new timeframe for an app launch to the Department of Health and Social Care (DHSC) — but the department had not responded to us at the time of publication.

Earlier this week the BBC reported that a former Apple executive, Simon Thompson, was taking charge of the delayed app project — while the two lead managers, the NHSX’s Matthew Gould and Geraint Lewis — were reported to be stepping back.

Back in April, Gould told the Science and Technology Committee the app would “technically” be ready to launch in 2-3 weeks’ time, though he also said any national launch would depend on the preparedness of a wider government program of coronavirus testing and manual contacts tracing. He also emphasized the need for a major PR campaign to educate the public on downloading and using the app.

Government briefings to the press today have included suggestions that app testers on the Isle of Wight told it they were not comfortable receiving COVID-19 notifications via text message — and that the human touch of a phone call is preferred.

However none of the European countries that have already deployed contacts-tracing apps has promoted the software as a one-stop panacea for tackling COVID-19. Rather tracing apps are intended to supplement manual contacts-tracing methods — the latter involving the use of trained humans making phone calls to people who have been diagnosed with COVID-19 to ask who they might have been in contact with over the infectious period.

Even with major resource put into manual contacts-tracing, apps — which use Bluetooth signals to estimate proximity between smartphone users in order to calculate virus expose risk — could still play an important role by, for example, being able to trace strangers who are sat near an infected person on public transport.

Update: The DHSC has now issued a statement addressing reports of the switch of app architecture for the NHS COVID-19 app — in which it confirms, in between reams of blame-shifting spin, that it’s testing a new app that is able to plug into the Apple and Google API — and which it says it may go on to launch nationally, but without providing any time frame.

It also claims it’s working with Apple and Google to try to enhance how their technology estimates the distance between smartphone users.

“Through the systematic testing, a number of technical challenges were identified — including the reliability of detecting contacts on specific operating systems — which cannot be resolved in isolation with the app in its current form,” DHSC writes of the centralized NHS COVID-19 app.

“While it does not yet present a viable solution, at this stage an app based on the Google / Apple API appears most likely to address some of the specific limitations identified through our field testing. However, there is still more work to do on the Google / Apple solution which does not currently estimate distance in the way required.”

“Based on this, the focus of work will shift from the current app design and to work instead with Google and Apple to understand how using their solution can meet the specific needs of the public,” it adds.

We reached out to Apple and Google for comment. Apple declined to comment.

According to one source, the UK has been pressing for the tech giants’ API to include device model and RSSI info alongside the ephemeral IDs which devices that come into proximity exchange with each other — presumably to try to improve distance calculations via a better understanding of the specific hardware involved.

However introducing additional, fixed pieces of device-linked data would have the effect of undermining the privacy protections baked into the decentralized system — which uses ephemeral, rotating IDs in order to prevent third party tracking of app users. Any fixed data-points being exchanged would risk unpicking the whole anti-tracking approach.

Norway, another European country which opted for a centralized approach for coronavirus contacts tracing — but got an app launched in mid April — made the decision to suspend its operation this week, after an intervention by the national privacy watchdog. In that case the app was collecting both GPS and Bluetooth — posing a massive privacy risk. The watchdog warned the public health agency the tool was no longer a proportionate intervention — owing to what are now low levels of coronavirus risk in the country.

Apple Pay and iOS App Store under formal antitrust probe in Europe

Published June 16, 2020

Apple is under formal investigation by antitrust regulators in European Union — following a number of complaints related to how it operates the iOS App Store and also its payment offering, Apple Pay.

The Commission said today that it has concerns that conditions and restrictions applied by the tech giant may be distorting competition in a number of areas, following a preliminary probe of the issues.

Back in March 2019, European music streaming service Spotify filed an antitrust complaint against Apple — railing very publicly against what it dubbed an “Apple tax”; aka the 30% tariff the tech giant applies on accepting payments in apps on its App Store. Spotify also accused Apple of impeding its business by applying arbitrary rules — such as making it harder to offer its own users discounts.

The Commission confirmed today that it’s looking formally into whether Apple’s rules for app developers on the distribution of apps via the App Store violate EU competition rules. It said the probe focuses on Apple’s mandatory requirement that app developers use its own proprietary in-app purchase system, as well as restrictions applied on the ability of developers to inform iPhone and iPad users of alternative cheaper purchasing possibilities outside of apps.

As well as the very public complaint from Spotify, the Commission has received a similar complaint from an unnamed e-book/audiobook distributor related to the impact of the App Store rules on competition.

Two specific restrictions imposed by Apple in its agreements with companies that wish to distribute apps to users of Apple devices will be investigated, per the Commission — namely [emphasis its]:

(i) The mandatory use of Apple’s own proprietary in-app purchase system “IAP” for the distribution of paid digital content. Apple charges app developers a 30% commission on all subscription fees through IAP.

(ii) Restrictions on the ability of developers to inform users of alternative purchasing possibilities outside of apps. While Apple allows users to consume content such as music, e-books and audiobooks purchased elsewhere (e.g. on the website of the app developer) also in the app, its rules prevent developers from informing users about such purchasing possibilities, which are usually cheaper.

“Following a preliminary investigation the Commission has concerns that Apple’s restrictions may distort competition for music streaming services on Apple’s devices,” it writes in a press release. “Apple’s competitors have either decided to disable the in-app subscription possibility altogether or have raised their subscription prices in the app and passed on Apple’s fee to consumers.

“In both cases, they were not allowed to inform users about alternative subscription possibilities outside of the app. The IAP obligation also appears to give Apple full control over the relationship with customers of its competitors subscribing in the app, thus dis-intermediating its competitors from important customer data while Apple may obtain valuable data about the activities and offers of its competitors.”

Commenting in a statement, Commission EVP Margrethe Vestager — who heads up competition policy for the bloc — added: “Mobile applications have fundamentally changed the way we access content. Apple sets the rules for the distribution of apps to users of iPhones and iPads. It appears that Apple obtained a ‘gatekeeper’ role when it comes to the distribution of apps and content to users of Apple’s popular devices. We need to ensure that Apple’s rules do not distort competition in markets where Apple is competing with other app developers, for example with its music streaming service Apple Music or with Apple Books. I have therefore decided to take a close look at Apple’s App Store rules and their compliance with EU competition rules.”

Vestager’s reference to a “gatekeeper” role has specific significance as the Commission is currently consulting on updating regulations for digital platforms — including floating the possibility of ex ante regulation for platforms deemed to be gatekeepers vis-a-vis other suppliers. (In parallel, the Commission is consulting on updates to competition law that may allow it to intervene more swiftly in future, in instances where it suspects digital markets have ‘tipped’.)

Spotify welcomed the Commission’s action, writing in a statement:

Today is a good day for consumers, Spotify and other app developers across Europe and around the world. Apple’s anticompetitive behavior has intentionally disadvantaged competitors, created an unlevel playing field, and deprived consumers of meaningful choice for far too long. We welcome the European Commission’s decision to formally investigate Apple, and hope they’ll act with urgency to ensure fair competition on the iOS platform for all participants in the digital economy.

On Apple Pay, the Commission said a formal investigation of how it operates the payment tech will look at the “terms, conditions and other measures” Apple applies for integrating the payment solution in merchant apps and websites on iPhones and iPads; Apple’s limitation of access to the NFC functionality on iPhones for payments in stores; and allegations of “refusals of access to Apple Pay”.

Following a preliminary probe, the Commission said it is concerned Apple’s processes “may distort competition and reduce choice and innovation”.

It also notes that Apple Pay is the only mobile payment solution that is allowed to access NFC technology on iOS devices for making payments in stores.

“The investigation will also focus on alleged restrictions of access to Apple Pay for specific products of rivals on iOS and iPadOS smart mobile devices,” it added.

The Commission said it will carry out the investigations “as a matter of priority”, but there’s no set timeframe for how long this process might take.

EU antitrust investigations have tended to take a number of years from an announcement of a formal probe to a decision being reached. (Although, in an ongoing investigation against Broadcom, Vestager recently dusted off a tool to accelerate regulatory intervention — but as yet there’s no formal ‘statement of objections’ against Apple so it remains to be seen how this case will proceed, and whether regulators may seek to speed up any intervention.)

Reached for comment on the Commission’s announcement of the two antitrust investigations, Apple dubbed the complaints “baseless” — choosing to throw shade on the complainants by claiming these companies are after “a free ride, and don’t want to play by the same rules as everyone else”.

Here’s Apple’s statement on the two investigations in full:

Throughout our history, Apple has created groundbreaking new products and services in some of the most fiercely competitive markets in the world. We follow the law in everything we do and we embrace competition at every stage because we believe it pushes us to deliver even better results.

We developed the App Store with two goals in mind: that it be a safe and trusted place for customers to discover and download apps, and a great business opportunity for entrepreneurs and developers. We’re deeply proud of the countless developers who’ve innovated and found success through our platform. And as we’ve grown together, we’ve continued to deliver innovative new services — like Apple Pay — that provide the very best customer experience while meeting industry-leading standards for privacy and security.

It’s disappointing the European Commission is advancing baseless complaints from a handful of companies who simply want a free ride, and don’t want to play by the same rules as everyone else. We don’t think that’s right — we want to maintain a level playing field where anyone with determination and a great idea can succeed.

At the end of the day, our goal is simple: for our customers to have access to the best app or service of their choice, in a safe and secure environment. We welcome the opportunity to show the European Commission all we’ve done to make that goal a reality.

Apple has had a number of run-ins with EU regulators over the years — including a probe of its acquisition of Shazam (which was later cleared); a major investigation of ebook pricing; and a probe of tax benefits in Ireland which saw it on the hook for $15BN.

French competition regulators also recently fined the tech giant $1.2BN for anti-competitive sales tactics. It’s also been fined $27M by French regulators this year for throttling old iPhones.

This report was updated with comment from Spotify

Marietje Schaake is ‘very concerned about the future of democracy’

Published June 15, 2020

Scott Bade
Contributor

Scott Bade is a former speechwriter for Mike Bloomberg and co-author of “More Human: Designing a World Where People Come First.”

5G, AI, cybersecurity and renewable energy set for investment boost under EU coronavirus recovery plan

Published May 27, 2020

The European Commission is proposing to direct billions of euros of financial relief into high tech and green investments to help the bloc recover from the coronavirus crisis.

Technologies such as 5G, AI, cloud, cybersecurity, supercomputing and renewable energy look set to benefit from a €750BN pan-EU support package set out today — aligning with the Commission’s pre-existing policy priorities before the pandemic struck the region, causing thousands of deaths and major economic damage.

“Urgent action is needed to kick-start the economy and create the conditions for a recovery led by private investment in key sectors and technologies. This investment is particularly crucial to the success of Europe’s green and digital transitions,” it writes in a factsheet on its budget proposal set out today — which is being slated as a wider “recovery plan” for Europe.

“Investment in key sectors and technologies, from 5G to artificial intelligence and from clean hydrogen to offshore renewable energy, holds the key to Europe’s future,” it adds.

On the green deal front, it’s touting:

A massive renovation wave of our buildings and infrastructure and a more circular economy, bringing local jobs;
Rolling out renewable energy projects, especially wind, solar and kick-starting a clean hydrogen economy in Europe;
Cleaner transport and logistics, including the installation of one million charging points for electric vehicles and a boost for rail travel and clean mobility in our cities and regions;

It also plans to funnel more financial support into a Just Transition Fund to support re-skilling and help businesses tap into the economic opportunities offered by digitization and going green.

The Commission estimates that at least €1.5 trillion will be needed to reboot the EU’s economy as a result of the pandemic crisis in 2020-2021 alone — so the budget proposals include a revision of the 2014-2020 multiannual financial framework as well as a financial framework for the 2021-2027 period.

The Commission is proposing to borrow €750BN on the financial markets, through the issuance of bonds, for a ‘Next Generation EU’ fund which will be channelled through EU programs between 2021 and 2024 — with the loan to be repaid over “a long period of time throughout future EU budgets” (not before 2028 and not after 2058).

It’s proposing three investment pillars for this fund: One focused on support for EU Member States via direct investment and reforms; a second focused on kick starting the EU economy by incentivizing private investments; and a third aimed at learning lessons from the COVID-19 crisis, with a big focus on health, as well as civil contingencies and foreign aid.

Under the first pillar, digital and green technologies are set to benefit from a proposed €560BN Recovery and Resilience Facility that will offer EU Member States financial support for related investments and reforms, including a grant facility of up to €310BN and up to €250BN available in loans.

“Support will be available to all Member States but concentrated on the most affected and where resilience needs are the greatest,” the Commission said today.

It’s also proposing €15BN extra for the European Agricultural Fund for Rural Development — to “support rural areas in making the structural changes necessary in line with the European Green Deal and achieving the ambitious targets in line with the new biodiversity and Farm to Fork strategies”.

Under the second pillar, a new Solvency Support Instrument is intended to mobilize private resources to support what the Commission bills as “viable” European companies in the sectors, regions and countries most affected. It wants this support to be operational from 2020, and is suggesting a budget of €31BN with the aim of aiming to unlock €300BN in solvency support for companies from all economic sectors (to “prepare them for a cleaner, digital and resilient future”, as it puts it).

There’s also more money for the InvestEU investment program which the Commission wants to see hitting €15.3BN over the budget period to spin up more private investment in projects across the EU.

It’s also proposing a new Strategic Investment Facility be built into InvestEU which it wants to generate investments of up to €150BN to boost the resilience of “strategic sectors”, again notably those linked to the green and digital transition — with €15BN set to be chipped in here from the Next Generation EU pot.

Under the third pillar, the Commission is earmarking €9.4BN for a new health programme, EU4Health, that’s intended to strengthen health security and prepare for future health crises.

While the Horizon Europe research program is set to get €94.4BN — including to support what it dubs “vital research” in health, resilience and the green and digital transitions.

Commenting in a statement, European Commission president, Ursula von der Leyen, said: “The recovery plan turns the immense challenge we face into an opportunity, not only by supporting the recovery but also by investing in our future: the European Green Deal and digitalization will boost jobs and growth, the resilience of our societies and the health of our environment. This is Europe’s moment. Our willingness to act must live up to the challenges we are all facing. With Next Generation EU we are providing an ambitious answer.”

In terms of next steps, the Commission’s budget proposals will need to gain political agreement from the European Council. It’s hoping will be achieved by July, with the EU’s executive keen to impress on Member States there’s no time to lose in financing coronavirus relief.

The EU parliament will also need to have its say but the Commission has penciled in early autumn for the adoption of the revised 2014-2020 framework and December 2020 for adoption of the revised Multiannual Financial Framework 2021-2027 (as well as Member States’ Own Resources Decision) — with the aim of implementing the latter framework in January 2021.

Tech-driven change a key priority for new EC president

Call for EU state aid rules to flex for startups

Published May 18, 2020

European startups are calling for more flexibility in EU state aid rules to allow national governments to provide liquidity for the region’s fledgling digital businesses during the COVID-19 crisis.

In a joint letter addressed to Commission EVP Margrethe Vestager, more than a dozen startup associations from across the bloc have called for rules to be adapted to ensure digital businesses are not blocked from receiving any emergency state aid.

In March the Commission applied an update to EU state aid rules clarifying how Member States can provide support to homegrown businesses during the coronavirus emergency.

However the startup association representatives co-signing the latter — which include reps from Coadec in the UK, France Digitale, Germany’s Bundesverband Deutsche Startups, Startup Poland and several others — are concerned the framework is being too narrowly drawn where digital upstarts are concerned.

They point out that startups may be intentionally operating at a loss as a calculated bet on gaining scale down the line, making the current rules a poor fit.

“Startups across Europe report that the Temporary Framework for State Aid is not yet giving enough flexibility to Member States to support startup ecosystems,” they write. “The definition of an ‘undertaking in difficulty’ is intended to apply to loss-making businesses. Such a definition will often be enough to deny support being given to such a business. However many startups are loss-making by design in their first years, as they are taking a calculated bet on exponential growth and associated job growth that will emerge in the following years.

“Only taking the current cash flow into account belittles the economic potential of these startups and prevents them from receiving much-needed support. In doing so it can undermine the post COVID-19 recovery, as it is today’s loss making startups which will be the driver for economic and job growth in the future.”

The letter goes on to call for startups to “receive the support that other economic actors are also receiving”.

“Startups provide a key opportunity for our economies and societies to recover as we come out of COVID,” they suggest, adding: “They will play a central part in re-growing our economy and crucially in doing so on a more carbon-neutral footing.”

We reached out to the Commission for a request for comment but at the time of writing it had not responded.

While it might a bit of a contradiction for VC-backed tech businesses which may choose to operate at a loss during ‘normal’ times to be calling for liquidity help now, Benedikt Blomeyer, EU policy director at Allied for Startups — one of a number of startup associations signing the letter — told us the argument is simply that Europe’s startups should be able to expect the same kind of support that is being extended to other types of businesses.

A number of EU Member States have laid out major support programs for startups to date — such as France’s $4.3BN liquidity support plan, announced in March; and a match fund revealed last month in the UK (which remains an EU member until the end of this year).

But the contention appears to be that liquidity isn’t flowing to all the European startups that need it, nor arriving in a timely enough way.

“For startups, loss-making doesn’t mean that it is necessarily a failing business,” Blomeyer told TechCrunch. “The bigger picture is that we are looking at startup ecosystems as key providers of jobs and economic growth coming out of the crisis. Some startups will fail, just like other businesses. But the question is whether startups should be able to access the same kind of support that other companies can to help them survive this crisis. We believe they should.”

Commenting on the issue in a statement, Paolo Palmigiano, head of competition, EU & trade for law firm Taylor Wessing, agreed the EU state aid rules may struggle to accommodate Internet businesses.

“The criteria introduced by the Commission in the Framework that a company must be viable as of 31 Dec 2019 makes sense in the old brick and mortar world. A company which would have gone in any case bankrupt, even without the current crisis, should not receive aid. The criteria start to be more complex and causes difficulties for tech companies which might not be profitable at the time although they could be in the future,” he said.

“The state aid rules were created in the 60s at a time when the single market did not exist and Europe had a lot of old-style industries (like steel). We need to see how the Commission react but I can see them struggling – how do you distinguish a loss making tech company which in any case would have gone bankrupt from a loss making company that will become profitable in the short term?”

Asked how it believes the Commission should replace the current viability criteria and assess which startups merit help and which don’t, Allied for Startups’ Blomeyer called for a blanket exemption for startups founded over the last half decade or more.

“There could be a clear exemption from the UID test for companies that have been set up in the last 5-7 years,” he suggested. “We need to underline that this is an unprecedented crisis that requires extraordinary measures. So while in normal times a regular process of assessing whether/how to assess startups might have worked, now the ecosystems that built them are melting away before our eyes because of the barriers. The basic conundrum is that it is unclear whether a loss-making startup is indeed not a viable business. This needs resolving.”

In what now feels like an earlier age late last year — as European Commission president Ursula von der Leyen was taking up her five-year mandate — tech-driven change was identified as one of her key policy priorities, with digitization and a green deal taking center stage, alongside a push for European tech sovereignty and support for homegrown startups to scale up.

So if Europe’s startups are feeling overlooked now, in the middle of an unprecedented economic shock, that hardly reflects well on the Commission’s claimed high tech policy goals.